Ford CEO Jim Farley Talks EV Business Overhaul & Extended-Range Hybrid Vehicles | Bloomberg Talks

Well, as you said, it was really the customer changing their decision. You know, we saw hybrids really take off the last couple years. Last month, we had a 30% increase in our hybrid sales. We're now number three, and I think we're 80% hybrid market share in trucks. So we saw this happening. We also saw the more expensive EVs really suffer in the market and the more affordable EVs do better. And then the last couple months was really remarkable. The EV market in the US went from 12% in the industry to only 5%. And that really in the end was the big decider for us. But look, we're going to 50% electric. It just will be hybrids and E-REVs and electric. It won't be just pure electrics.

Great question. And this year in the short term, it's really our cost of our company. Our quality is getting better and so our costs are much more competitive. In fact, the Nollis aluminum has cost us more like two billion, but we're still raising guidance. Look, for this announcement, Matt, it's really about moving to more profitable vehicles. You know, we're going to make in Tennessee now an affordable pickup truck. I think it's going to really surprise the market. These are customers we know, not a lot of guesswork in terms of the revenue, the cost we need to get out, and a more affordable van in Ohio. So these are going to be better investments for the company profit, and all those hybrid sales are really profitable vehicles for us as we basically deploy hybrid across our lineup. But we're also going into the energy storage business to 20 gigawatt hours. That's a big move. We're going to convert our battery plants from automotive batteries to energy storage batteries using LFP. That's also a big pivot that is profit positive for the company.

Well, look, it's our plant. It's our people, and we designed it that way. We have a licensing agreement, but we feel like it's better to build these batteries in the United States with American workers, with our own Ford workers, and understand the IP than to import them like they're being done today. The best way to compete with the Chinese is to get close to the IP and then run the plants at Ford. When Ford knows how to build things, we know how to do this. So I think this is much better for America. We're talking about thousands of incremental jobs versus importing batteries like we see today. Much better for America.

Great question. Well, we're busy now. We have to move very fast. This business moves much faster than the auto business. We're converting our Michigan plant as we speak with all new equipment to make energy storage, which is slightly different than automotive. And then we're building a whole new plant, converting Kentucky 1 to 20 gigawatt hours, and that will be landing in late 2027. We're going to be selling and servicing batteries, not just the cells as a contract manufacturer. We're actually going to be selling the huge storage containers to utility companies and the AI data center companies in 2027. We're already out there quoting this business now. We know what kind of price points we need to get to for it to be profitable. And this is not our first rodeo as a manufacturing company.